How Are Investors in Zero-Coupon Bonds Compensated for Making Such

question 57

Multiple Choice

How are investors in zero-coupon bonds compensated for making such an investment?

• A)Such bonds are purchased at their face value and sold at a premium at a later date.
• B)The bond makes regular interest payments.
• C)Such bonds are purchased at a discount to their face value.
• D)The face value of these bonds is less than the value of the bond when the bond matures.

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Definitions:

Executive Action

Decisions or measures taken by an executive branch of government, including the President or executives within organizations, often involving policy enforcement or implementation.

Forecasting

Forecasting is the process of making predictions about future events or trends based on current and historical data analysis, widely used in fields such as economics, weather, and business planning.

Environmental Changes

Alterations in the surrounding conditions, including social, economic, political, and natural environments that can impact organizations and individuals.

Buffering

The act of minimizing or preventing the negative effects of a problem, stress, or challenge by intervening in a protective or mitigating manner.